Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.
53.6% of New College Grads are Jobless or Underemployed in 2011
Dr. Andrew Sum crunched the numbers and for those graduating from college with a Bachelors we have some startling news. A whopping 53.6% of those under the age of 25 who have a college degree are either unemployed or unable to land a job in a field associated with their college major. Associated Press:
About 1.5 million, or 53.6 percent, of bachelor's degree-holders under the age of 25 last year were jobless or underemployed, the highest share in at least 11 years. In 2000, the share was at a low of 41 percent, before the dot-com bust erased job gains for college graduates in the telecommunications and IT fields.
Out of the 1.5 million who languished in the job market, about half were underemployed, an increase from the previous year.
In the last year, they were more likely to be employed as waiters, waitresses, bartenders and food-service helpers than as engineers, physicists, chemists and mathematicians combined (100,000 versus 90,000). There were more working in office-related jobs such as receptionist or payroll clerk than in all computer professional jobs (163,000 versus 100,000). More also were employed as cashiers, retail clerks and customer representatives than engineers (125,000 versus 80,000).
The above Professor Andrew Sum study, sponsored by AP, simply knocks the socks off the myth a college degree is the ticket to the middle class, higher income and better life. Somehow one doesn't need to go into massive student loan debt to learn how to say do you want fries with that?
Food Stamp Usage Increased 70% from 2007 to 2011
When the CBO came out with their food stamp use projections, many were shocked. What's more shocking are the implications to reduce food stamp usage by lowering the income level requirements in order to get them.
First, the shocking statistics. In 2011, 1 in 7, or 45 million people were on food stamps. This is a 70% increase from 2007 average food stamp use.
Food stamp usage is projected to increase until 2014 too. Even by 2022 10% of the population will be on food stamps. While the CBO acknowledges food stamp usage is sky high because people are broke and hungry, the report also amplifies spending on food stamps increased 135% from 2007 to 2011.
Here's the kicker. Above is the CBO's graphic on how to reduce eligibility requirements to reduce the expenditures of food stamps. Get that? People are so poor, so broke, they literally don't have money for food. The answer? Reduce the eligibility requirements to get food. Nice.
IMF Says US Debtor Nation Holds Back Economic Growth
The IMF released a new report. Nope, this report isn't our usual austerity mumbo jumbo. This time it's about personal debt. Guess what the IMF found? The more households go deep into debt during an economic boom, the harder the resulting crash is and the longer it takes to get out of it.
Housing busts preceded by larger runups in gross household debt—mortgages, personal loans, and credit card debt—are associated with significantly larger contractions in economic activity.
Household consumption and real GDP fall substantially more, unemployment rises more, and the reduction in economic activity persists for at least five years. A similar pattern holds for recessions more generally: those preceded by larger increases in household debt are more severe, according to the study’s statistical analysis.
This is sobering for economies today, such as Iceland, Ireland, Spain, the United Kingdom, the United States, and others, where house prices collapsed during the Great Recession and the substantial amount of debt racked up during the boom became a burden holding back the recovery.
What does the IMF recommend? Why debt forgiveness, a reduction in foreclosures and debt restructuring. U.S. do any of that? Nah.
Household consumption falls by more than four times the amount explained by the fall in house prices in high-debt economies. It seems to be the combination of house price declines and prebust household indebtedness that accounts for the severity of the contraction.
Nor is the larger contraction in the economy simply driven by financial crises. The research finds that the relationship between household debt and the contraction in consumption holds even for economies that did not experience a banking crisis around the time of the housing bust.
Foreign Workers Used Instead of Training Americans
Someone finally noticed the massive importation of foreign workers for health care jobs. In Healthcare's Foreign Invasion, the author asks why aren't Americans being hired in these jobs?
Approximately 15 percent of all healthcare workers and 25 percent of all physicians in the United States were born and educated elsewhere. This means that 1.5 million healthcare jobs are “insourced,” occupied by foreign-born, foreign-trained workers brought into the United States on special visas earmarked for healthcare jobs. This number is 50 percent greater than the total number of jobs in the U.S. auto-manufacturing industry. It’s amazing to consider that in 2008 and 2009, the auto industry, which makes up just 3.6 percent of the U.S. economy, received a $97 billion bailout. If we estimate that each of these 1.5 million insourced healthcare jobs has an average wage of $60,000, that’s $90 billion a year in wages going to people brought into the United States to work rather than training Americans to do the same jobs.
The healthcare industry makes up 16 percent of our economy. Yet even in these days of close to 10 percent unemployment, we do not invest enough money in our young people to train them for jobs in healthcare — an already understaffed industry that will have to serve an additional 32 million people once the provisions of the 2010 health-reform law take full effect. Instead, when faced with pressure from hospitals and nursing homes for more healthcare workers, the federal government grants visas to import nurses, physicians, pharmacists, physical therapists, and many other types of healthcare workers from countries that can ill afford to lose them.
We note U.S. Medical Schools are absurd in their GPA requirements to even get in, never mind their flunk out rates and guaranteed 6 figure student debt one will incur. The thing is, one can get into a foreign medical school with pretty much a "C" average and incur little debt. What's wrong with this picture? Same is true with United States nursing schools.
Nursing Homes Putting the Elderly in Chemical Torturous Straight Jackets
This is an outrage. 1 in 5 nursing homes are giving powerful anti-psychotic drugs to old people. Why? The drugs put someone in a chemical straightjacket and turn them into a Zombie. In other words, easier to control the body and still collect Medicaid, Medicare and Social Security off of these people.
Federal data show that roughly 185,000 nursing home residents in the United States received antipsychotics in 2010 contrary to federal nursing home regulators’ recommendations - often elderly people like Murphy who have Alzheimer’s or other dementias.
The drugs, which are intended to treat severe mental illness such as schizophrenia, can leave people in a stupor. The US Food and Drug Administration has issued black-box warnings - the agency’s most serious medication alert - about potentially fatal side effects when antipsychotics are taken by patients with dementia.
Nursing home regulators have for years collected data about individual homes’ use of antipsychotics but have not publicly released facility-specific information, citing patient privacy concerns. The government finally provided the data to the Globe, 19 months after the newspaper submitted a Freedom of Information Act request.
The data show that in more than one in five nursing homes in the United States, antipsychotics are administered to a significant percentage of residents despite the fact that they do not have a psychosis or related condition that nursing home regulators say warrants their use.
Hospital Mergers & Acquisitions
Did you know we have an increase in mergers and acquisitions for hospitals and medical practices?
Hospital companies struck 86 merger and acquisition deals valued at $7.9 billion in 2011, the most in a decade, the Wall Street Journal reports. The Federal Trade Commission maintains that such deals can squash competition in local markets, enabling hospitals to secure enough market share that they can raise prices on patients and health insurance companies.
Almost 1 in 4 Unemployed in Spain
Spain is just a mess and yet another example of what austerity does:
The Spanish government reported that its unemployment rate rocketed to a record high of 24.4% in the first quarter.
That was an increase from the already-astronomical rate of 22.9% in the fourth quarter of 2011. Spain has been haunted by high unemployment for many years, particularly with young people, but this is the worst it has ever been. The total number of jobless rose by 365,900 between January and March 2012 to hit 5,639,500.
The timing couldn't have been worse, as Standard & Poor's downgraded Spain on Thursday to BBB+ from A-2, slamming the government for its mounting debts and shrinking economy. The rating agency issued a forecast that Spain's gross domestic product would contract by 1.5% in 2012 and pull back by another 0.5% in 2013.
This is what happens when Engineers are Undervalued
Surprise, equipment makers are putting backdoors on industrial embedded systems, used in security critical industrial applications. This is what happens when one labor arbitrages and power plays the geeks and techies. You get really stupid shit like this. Siemens is notorious to labor arbitrage their engineers and offshore outsource.
A Canadian company that makes equipment and software for critical industrial control systems planted a backdoor login account in its flagship operating system, according to a security researcher, potentially allowing attackers to access the devices online.
The backdoor, which cannot be disabled, is found in all versions of the Rugged Operating System made by RuggedCom (acquired by Siemens, ed.), according to independent researcher Justin W. Clarke, who works in the energy sector. The login credentials for the backdoor include a static username, “factory,” that was assigned by the vendor and can’t be changed by customers, and a dynamically generated password that is based on the individual MAC address, or media access control address, for any specific device.
Attackers can uncover the password for a device simply by inserting the MAC address, if known, into a simple Perl script that Clarke wrote. MAC addresses for some devices can be learned by doing a search with SHODAN, a search tool that allows users to find internet-connected devices, such as industrial control systems and their components, using simple search terms.
Why is IBM Allowed to Get Away with It?
This post is titled IBM Sneaking Around but it really should be why is IBM allowed to displace U.S. workers, all the while obtaining state, local and federal tax breaks and incentives.
IBM secured heavy incentives from state and local governments to minimize their costs in these locations and are achieving further savings by paying the technical team members, most of whom are new hires or fresh college grads with no experience, a fraction of what experienced support personnel would require.
Let’s look closer at Dubuque, not because it is any different from the rest of IBM USA but simply to characterize the company at a finer scale.
When IBM opened the Dubuque center the people of Iowa expected great things. The center was staffed by a small number of US IBMers in management positions. Big Blue then brought over people from India for "training", then sent them back. Few H1B visas were even required.
Every time IBM sent a batch of trainees back to India from Iowa they laid off US workers. While Dubuque was led to believe they’d get an influx of highly-paid new residents, what the city actually received was a transient workforce of underpaid people -- workers that may well be invisible to local government. It would be interesting to know how many permanent hires in Dubuque have been Iowa residents or graduates of Iowa universities? How many workers spend less than a year in Dubuque? Is Iowa seeing any benefit from the investment they made to open the IBM Dubuque center?
Whenever IBM has a big project they now have to bring in extra workers, usually from India. I have been told they plan the arrivals over several days to a few weeks. They route people through different airports. They make sure there are never more than two or three workers coming on the same flight, effectively avoiding notice by Homeland Security.
Oldie But Goodie, Who is Larry Fink?
Wondering who the hell BlackRock is and why they have all of those government acquired toxic asset portfolios and contracts? Heard Larry Fink's name thrown around as Geithner's replacement for U.S. Treasury Secretary? It's time to read this 2010 Vanity Fair article, so you know what animal you're dealing with.
Though few Americans know his name, Larry Fink may be the most powerful man in the post-bailout economy. His giant BlackRock money-management firm controls or monitors more than $12 trillion worldwide—including the balance sheets of Fannie Mae and Freddie Mac, and the toxic A.I.G. and Bear Stearns assets taken over by the U.S. government last year. How did Fink rebound from a humiliating failure to become the financial fulcrum of Washington and Wall Street?
Sheila Bair Gets Her Groove On
Former FDIC chair Sheila Bair is not happy about the uber-low Federal Funds Rate, as in yet another bubble creation unhappy.
In a recent series of college lectures, Ben Bernanke sounded a positive note, extolling the Fed's low-interest-rate policy and predicting sustainable economic growth. I want to believe him, but his words echo the confidence exuded by the Fed in late 2006 when it missed the housing bubble. Is it missing the bond bubble now?
The Fed has maintained interest rates at or near zero for four years running, even though the financial system has been relatively stable since 2009. The Fed's actions have kept Treasury bond prices high (while keeping the government's interest costs low), but the fundamentals do not support the high valuations, given the fiscal mess we are in. Sooner or later, the bond bubble will burst. History has shown that a structurally weak economy combined with a fiscally irresponsible government propped up by accommodative central-bank lending always ends badly. Absent a change in policies, a toxic brew of volatile interest rates and uncontrollable inflation could define our future.
Occupy Philly Protestors Acquitted
Occupy Philly Protestors were all acquitted. Yet, by being buried in legal wranglings, what does this do to the real protest message and issue?
I interviewed Paul Hetznecker, one of the lead attorneys among a team of 14 lawyers who defended 31 Occupy Philly protesters who were arrested on November 30, 2011, shortly after Occupy Philly was shut down. Their trial was Thursday, April 26th and every protester was acquitted of all charges-- obstruction of a highway, failure to disperse and conspiracy. Hetznecker discusses the implications of the acquittals for Occupy Wall Street protesters and freedom of speech.
Saturday Reads edited after publication, new articles
Saturday reads often has reports, details that I wanted to write a full bore post around but couldn't get to it in a timely fashion.
After this collection was published, I found some great, additional articles on corporations, sectors displacing, refusing to hire or train U.S. workers, (what a surprise), but the good news is this topic has gone mainstream, and rightly so. Even better news is groups of all political flavors are realizing labor arbitrage, displacing U.S. workers is really bad news, not only for U.S. labor but for the economy as a whole. Getting played by the Democrats seemingly against offshore outsourcing, while wanting insourcing, while Republicans don't want insourcing but love offshore outsourcing is a classic corporate lobbyist divide and conquer technique to divide the Populist.
added another must read story on Sunday
The idea of drugging old people with torturous drugs is something I've personally know about for 20 years. Finally it is exposed by the Boston Globe. If you are aging or your parents, well, anyone who expects to make it to old age, you need to read this story. It's a crime. If old people were beaten daily with rubber hoses, people would go to jail, yet do it with a pill, it takes this long to even get an investigative article.
Hilarious WaPo call out
Hilarious Washington Post call out on their corporate lobbyist written claims of a "skilled worker shortage". A classic, Business Insider, not exactly "Mr. Union", nailed it.
Occupy Protests on May Day
One might be wondering why we're not covering the May Day protests. Unfortunately the illegal immigrant, no person is illegal, any border hopper of course should be granted instant citizenship, unlimited global migration is a right and so on special interests have taken over the protests and mixed the agenda and message.
We're sorry folks, but labor economics is labor economics and this "no national borders" agenda is pure economic insanity in terms of U.S. labor supply. Not exactly helping the U.S. labor force and middle class, in spite of the never ending spin, even some Academics get into the game, trying to claim up is down due to their philosophy.
Anyway, that's a real shame to have this happen, to have the illegal immigrant lobby, which includes the U.S. Chamber of Commerce and that infamous power and money group, La Raza, take over OWS, but there ya have it!